Archive for February 3rd, 2012

February 3, 2012

Art Laffer: Why Gingrich’s Tax Plan Beats Romney’s

Art Laffer, the architect of Ronald Regean’s economic plan, writes in today’s Wall Street Journal why Gingrich has a “significantly better” tax plan that Romney.

Ockham's Razor

Ockham’s razor, (the law of parsimony, economy or succinctness), is a principle that generally recommends that, from among competing hypotheses, selecting the one that makes the fewest new assumptions usually provides the correct one, and that the simplest explanation will be the most plausible until evidence is presented to prove it false.

If we judge both leading contenders in the Republican primary, Newt Gingrich and Mitt Romney, by what they’ve done in life and by what they propose to do if elected, either one could be an excellent president. But when it comes to the election’s core issue—restoring a healthy economy—the key is a good tax plan and the ability to implement it.

Mr. Gingrich has a significantly better plan than does Mr. Romney, and he has twice before been instrumental in implementing a successful tax plan on a national level—once when he served in Congress as a Reagan supporter in the 1980s and again when he was President Clinton’s partner as speaker of the House of Representatives in the 1990s. During both of these periods the economy prospered incredibly—in good part because of Mr. Gingrich.

Jobs and wealth are created by those who are taxed, not by those who do the taxing. Government, by its very nature, doesn’t create resources but redistributes resources. To minimize the damages taxes cause the economy, the best way for government to raise revenue is a broad-based, low-rate flat tax that provides people and businesses with the fewest incentives to avoid or otherwise not report taxable income, and the least number of places where they can escape taxation. On these counts it doesn’t get any better than Mr. Gingrich’s optional 15% flat tax for individuals and his 12.5% flat tax for business. Each of these taxes has been tried and tested and found to be enormously successful.

Hong Kong, where there has been a 15% flat income tax on individuals since 1947, is truly a shining city on the hill and one of the most prosperous cities in history. Ireland’s 12.5% flat business income tax propelled the Emerald Isle out of two and a half centuries of poverty. Mr. Romney’s tax proposals—including eliminating the death tax, reducing the corporate tax rate to 25%, and extending the current tax rates on personal income, interest, dividends and capital gains—would be an improvement over those of President Obama, but they don’t have the boldness or internal integrity of Mr. Gingrich’s personal and business flat taxes.

When it comes to economic efficiency, nothing holds a candle to a low-rate, simple flat tax. As I explained in a op-ed on this page last spring (“The 30-Cent Tax Premium,” April 18), for every dollar of net income tax collected by the Internal Revenue Service, there is an additional 30¢ paid out of pocket by the taxpayers to maintain compliance with the tax code. Such inefficiency is outrageous. Mr. Gingrich’s flat taxes would go a lot further toward reducing these additional expenses than would Mr. Romney’s proposals.

Mr. Gingrich’s tax proposal is not revenue-neutral, nor should it be. If there’s one truism in fiscal policy, it’s this: Wasteful spending will always rise to the level of revenues. Whether you’re in Greece, Washington, D.C., or California, overspending is a prosperity killer of the first order. Mr. Gingrich’s flat tax proposals—along with his proposed balanced budget amendment—would put a quick stop to overspending and return America to fiscal soundness. No other candidate comes close to doing this.

via Art Laffer: Why Gingrich’s Tax Plan Beats Romney’s | Newt Gingrich 2012.

February 3, 2012

Supreme Court Case Could Threaten Big Labor’s Ability to Deduct from Public Employee Paychecks

Union Rank and File are getting pissed

The case is one of a growing number of examples of how public employees, including public school teachers, are pushing back against forced union dues – something many consider a violation of their First Amendment rights. American citizens should not be forced to financially support an organization or political causes they don’t agree with, union objectors rightly contend.

By forcing members and non-members to subsidize its radical political agenda, Big Labor may have finally cooked its Golden Goose.

SEIU wants to run from the case

The Supreme Court case stems from a “special assessment” that was automatically withdrawn from union and non-union state employees’ checks in 2005 to help defeat a ballot proposal in California that would have made it illegal to force employees to pay dues that would be used for political purposes.

The plaintiffs, who are non-union members who pay a reduced fee in lieu of union dues, claim their rights were violated when they were charged more than their regular fees to support a union political effort.

They filed a lawsuit with the help of the National Right to Work Foundation, and a federal district court ordered SEIU to pay some of their money back, records show.

SEIU appealed the decision, the appeals court sided with the union, and the objecting non-union state employees took the case to the U.S. Supreme Court. Then a funny thing happened. The union decided that it didn’t want to pursue the case anymore, refunded the employees the full amount of the “special assessment,” and is now arguing that the case is moot because there is no longer a claim, records show.

The NRTWF attorneys representing the employees say the case is still important because it would settle the question of whether union officials must give employees a chance to object to a special assessment before the union sticks its grubby hand in the cookie jar. Plus, the union never really acknowledged wrongdoing or promised not to do it again, NRTWF attorney James Young argued.

During the hearing, several justices keyed in on an important question: Why does the union want to drop its case now that the Supreme Court has agreed to hear it?

SEIU attorneys contend it’s because the employees’ money has been repaid in full, the union has complied with the district court’s original order, and everything is now resolved.

We doubt very much that’s the case.

via » Supreme Court Case Could Threaten Big Labor’s Ability to Deduct from Public Employee Paychecks – Big Government.

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